War and Time Preference: The American Army in Australia
During the Second World War, over 120,000 American troops were stationed in Australia; hundreds of thousands more visited the country on furlough or passed through during transit to battle zones in the Southwest Pacific. In all, around one million American servicemen spent time in Australia during the war. Australia was garrisoned and transformed into a supply base when it became clear the Japanese were going to overrun the Philippines. As one army unit historian explains:
By the end of February 1942 the whole strategic pattern in [the Southwest Pacific] had changed. In the Philippines, American troops under General MacArthur were fighting gallantly to hold their position on Bataan and Corregidor but by this time it was clear that their resistance could not last indefinitely and that as a base for operations the Philippines were virtually lost to the Allies. The Netherlands East Indies were almost entirely in Japanese hands; all U.S. troops that could withdraw had returned to Australia.
Douglas MacArthur also stressed Australia’s strategic significance in his plan to strike back at the Japanese in Papua, New Guinea. Operations against the Japanese “involved provision for supply and reinforcement of advanced areas from rear bases in Australia which were in large part merely ports for the reshipping of material from the distant West Coast of the United States.”
Although most Australians welcomed the Americans as saviors, and relations were generally amiable, the conduct of some American personnel was reprehensible. Specifically, GIs committed all manner of crimes during the war, from murder and rape to vandalism and motor theft. As the American presence increased, so too did the number of arrests. In June 1942, 140 military personnel were arrested in Brisbane alone. In July, the number of arrests increased to 796 and to 1,128 in October. When the number of American personnel stationed in Australia peaked in 1943, the U.S. provost marshal in Brisbane likened the number of stabbings, assaults, and violence to a “crime wave.” The most notorious crimes were the three Jack-the-Ripper-like murders that took place in Melbourne in May 1942. In a 16-day period, three women were found strangled and half-naked in the city. The press dubbed the killings the “brownout murders.” After a brief investigation, Victoria police arrested U.S. Private Edward Joseph Leonski. After being handed over to American military authorities, Leonski was court-martialled, found guilty, and hanged.
War, Time Preference, and Crime
Whilst reading through thousands of crime reports, I was often struck by the lack of discernible motives and the GIs’ indifference to the consequences of their actions. One reason for this insouciance might have been the knowledge that officers were instructed to mete out severe punishments in extreme cases only. A JAG memorandum circulated in 1943 reminded officers that “the War Department has repeatedly admonished military leaders to resort to court martial only as a last resort; even then to utilize the lowest type of punishment and as indicative of a policy that this punishment should be resorted to, and then maintained, only when absolutely necessary.” There is also ample evidence that U.S. military authorities often spirited offenders out of the country rather than face pressure for a court martial from Australian authorities. It was much easier to send suspects to undisclosed “battle zones” and then refuse to divulge their locations to Australian police. Similarly, Queensland constables observed that when police made inquiries about American misconduct, GIs were transferred from their units and U.S. officials refused to provide their locations. Knowing they would probably be protected, even if they committed crimes, surely emboldened GIs. Of course, military training that dehumanized the individual, encouraged barbarism, destruction of property, and killing was another likely cause of American crime in Australia. After all, if soldiers were told it was okay to kill other human beings, why would they care about rape, theft, vandalism, etc., even if these crimes were committed against allied civilians?
Still, as important as the above explanations are, high time preference offers another reason for the conduct of American soldiers. The importance of time preference in understanding human action is nothing new to those who have some awareness of the Austrian School. Yet, among mainstream historians, whose knowledge of praxeology is limited, time preference is virtually unknown. The correlation between high time preference and crime, barbarism, and de-civilization is even more alien. This is not surprising given that there are very few studies that explore this correlation in any detail. Edward C. Banfield paved the way in his book The Unheavenly City Revisited, where he observed that:
The threat of punishment at the hands of the law is unlikely to deter the present-oriented person. The gains that he expects from the illegal act are very near to the present, whereas the punishment that he would suffer — in the unlikely event of his being both caught and punished — lies in a future too distant for him to take into account.
Hans-Hermann Hoppe expanded on Banfield’s insights in Democracy, the God that Failed:
While high time preference is by no means equivalent with crime ... a systematic relationship between them still exists, for in order to earn a market income a certain minimum of planning, patience, and sacrifice is required: one must first work for a while before one gets paid. In contrast, specific criminal activities such as murder, assault, rape, robbery, theft, and burglary require no such discipline: the reward for the aggressor is tangible and immediate, but the sacrifice — possible punishment — lies in the future and is uncertain.
More importantly, Hoppe elsewhere explains how state policies (taxes, regulations, welfare benefits, money printing, etc.), once institutionalized, will increase the time preferences of everyone to the point that:
the natural tendency of humanity to build an expanding stock of capital and durable consumer goods and to become increasingly more farsighted and provide for ever more distant goals may not only come to a standstill, but may be reversed by a tendency toward de-civilization: formerly provident providers will be turned into drunks or daydreamers, adults into children, civilized men into barbarians, and producers into criminals.
As indispensable as Hoppe’s insights are in explaining how state actions will lead to de-civilization, there is one state function that is not included in his study, namely, war. In the context of the American presence in Australia, the real chance of being maimed or killed on the battlefield increased the time preferences of GIs because there was a good chance that there was little future left to enjoy. Hoppe makes a similar observation when discussing how biology plays a role in time preference:
Becoming old and approaching the end of life, one’s time preference rate tends to rise. The marginal utility of future goods falls because there is less of a future left.
Ultimately, the war increased the real possibility of death in the near-future and hence many offenders gave little thought to consequences of their actions; instead they lived for the thrill of the moment and instant gratification. How concerned could soldiers be about crime and punishment when they might be dead in a month’s time?
Australian police reports describe hundreds of crimes that illustrate the correlation between high time preference and crime. Instant gratification was the clear motive in many incidents, some of which are described below. In 1944, three U.S. sailors after being arrested for destroying a series of shop windows in Brisbane admitted to police that “they were leaving Port next morning, and after they had consumed a quantity of liquor, they decided that they would have some fun and so broke the windows.” In November 1943, an American private accosted a woman in the Brisbane suburbs, dragged her into a field and raped her. Queensland police and the American MPs found the suspect and confronted the American with his victim; after the woman gave a detailed account of the crime, the private confessed. On 19 June 1944, Doris May Roberts was found beaten to death in a Brisbane laneway. That very night, Queensland police tracked down two Americans who were with Roberts before her murder. Upon interrogation, paratrooper Avelino Fernandez admitted to killing the woman. According to Fernandez, Roberts had willingly followed him to the laneway for sex but afterward demanded payment. This enraged Fernandez to the point that he punched the woman in the face and repeatedly kicked her in the head. Brisbane’s Courier Mail reported that the woman’s jaw had been broken, that she asphyxiated on her own blood, and that sex took place post-mortem.
It was not just the increased chance of death that resulted in short-termism and de-civilisation. As Hoppe states above, institutionalized property rights violations will lead to higher time preference. Although taxation, wealth redistribution, etc., spring to mind when one thinks of institutionalized property rights violations, one must ask: is there any greater property rights violation than involuntary servitude? We must remember that the majority of GIs during the Second World War were conscripts, i.e., slaves. These young men, having been dragooned into the military, having been removed from civil society, having lost their right to direct their own lives and plan for the future, and having every aspect of their lives regulated and controlled, understandably became present orientated because they were neither masters of their present circumstances nor, indeed, their future ones.
Coupled with suffering under a state of involuntary servitude was the peculiar American practice of providing servicemen with relatively high pay and access to amenities at subsidised prices. This was the deliberate policy of the Army Chief of Staff, General George C. Marshall, who believed that high pay improved “morale problems of inactive but articulate troops who were far from home.” Having every material need provided for could only mean an increase in time preference and a further diminution of personal responsibility. A sociological study conducted shortly after the war observed the connection between Marshall’s policy and the erosion of personal responsibility:
Over any period of time the dull, do-nothing routine stimulated escape reactions which, in decreasing order of frequency, were movies, gambling, liquor, and brothels. The complete exhaustion of the monthly paycheck within a few days was comparatively common. A soldier could squander his cash with equanimity, knowing that next month would see him “flush” again; while, in the meantime, there was always the assurance of food and shelter.
Army life, with its boredom, monotony, risk of death, and “nanny state” trappings increased time preference and diminished personal responsibility. As the famous war correspondent Ernie Pyle observed, a “soldier loses his sense of property. Nothing is sacred to him. In civilian life you’d call it stealing, but over there it’s the way they do.”
Time Preference and Sexual Relations
High time preference was manifested in other ways during the war. Walter Luszki, an officer with the 738th Police Battalion, observed short-termism and instant gratification in the form of sexual relations. In his book, A Rape of Justice: MacArthur and the New Guinea Hangings, Luszki describes that once he reached Brisbane, all of his battalion’s officers, including a committed family man, began “shacking up” with Australian women. According to Luszki, “an important reason for this behavior was the ever present nearness of death and the feeling that one might as well live it up while he could because time was short.”
Luszki’s comrades were not the only ones who decided to live it up; sex was everywhere during the war. The archival material is littered with flings that should seemingly belong in the 1960s rather than the supposedly-restrained 1940s. Queensland state police arrested couples having sex in broad daylight in Brisbane’s Botanic Gardens. After being caught in the act with an American soldier, one young woman begged the arresting constable to give her another chance, as she had a young son at home, and her husband would kill her. In another case, a group of gawking children drew a constable’s attention to an Australian women and a GI having sex in the gardens.
There also exists dozens of reports describing American servicemen making cuckolds out of Australian husbands. Here again we see instant gratification at work with little thought of consequences. Below is but one example of these affairs that is representative of the whole. In May 1943, American authorities were forced to deal with the womanizing of one Lieutenant Boyd Herman who had been having sex with an Australian sergeant’s wife. When the husband learned of the affair, he invited Herman to his home for dinner, “discussed the situation with him, and an agreement was reached that while Lt. Herman would be welcome in the home at any time, he was not to see Mrs. Noss or communicate with her” without his knowledge. The American broke his promise shortly thereafter, for Noss came home late one night to find Herman in his home with his wife. Noss protested the American’s behavior and forcibly threw him out of his house at which point Boyd produced a concealed handgun and threatened to shoot the Australian. Fortunately for the American lieutenant, Noss asked that U.S. authorities not to press charges.
Police woman Lillian Armfield’s wartime recollections provide more evidence of high time preference among GIs. She had the depressing job of “reclaiming” wayward girls in Sydney who were caught in flagrante delicto with American servicemen. As a part of her duties, Armfield often participated in vice squad raids against American Red Cross dormitories. The goal of the raids was eliminating statutory rape. However, it was impossible to stop because it was so widespread.
Given that the war increased time preference, it is no surprise that this translated into higher divorce rates. The Courier Mail reported that in 1943, 398 divorces were granted in Queensland. This was an all time high and there were over 100 more divorces recorded than in 1942. It is no coincidence that the 398 divorces in 1943 corresponded with the highpoint of the American presence in the country. Indeed, in 1943, 173 divorces were granted on the grounds of adultery and of these, 71 Americans were named as co-respondents. It is worth remembering that divorce is a formal dissolution of marriage that state authorities recorded in Australia; the number of de facto divorces in the form of broken homes surely rose too. The above data and anecdotes are significant for they illustrate that war did not raise time preferences for soldiers alone. Indeed, the war increased the time preferences of Australian civilians as well. The fear of Japanese attack, or even invasion, increased time preference; Australians also chose to live for the day because the future was more uncertain than it would have been during peacetime.
Encouraging High Time Preference: Marriage vs. Prostitution
Sexual encounters were often no more than business transactions, as prostitution, though technically illegal in Australia, was tolerated and given semi-official sanction during the war. Brisbane had over 20 brothels in the so-called “sin-centre” around Albert Street. Queensland police kept this area under surveillance and made sure the bordellos did not become a public nuisance. The Kings Cross area of Sydney was that city’s well-known red light district. Some brothels there catered solely to black or white GIs to avoid fights. Even smaller communities like Mt. Isa and Townsville had several brothels catering to American troops. There is even one story (probably apocryphal) that Prime Minister John Curtin sent a trainload of Sydney prostitutes to Brisbane to meet the American demand. Prostitutes likely had a good idea about regional demand and required no government train to get them to Brisbane.
It is not apocryphal, however, that American authorities encouraged short-term flings and discouraged marriages. The U.S. Army established prophylactic stations in several Australian cities and turned a blind eye to their men’s unseemly conduct. One result of promoting short-term sexual relations was an increase in venereal diseases. To help limit their spread, American authorities helped Australian police track down women who were thought infected. Australian women were kept under surveillance, confined to locked hospitals and forcibly treated for diseases.
At the root of discouraging marriages with Australian women was the desire to keep men focused on the war and fighting the Japanese. Realistically, however, military authorities had to accept that relations between the sexes were inevitable. David Reynolds makes this point in his book Rich Relations:
Sex was usually the preoccupation of unoccupied armies. ... Aside from the satisfaction of sexual drives, female company was an antidote to the all-male environment, an expression of personal freedom, and balm for the dehumanizing rituals of army life.
Historically army commanders have seen relationships between their soldiers and women as problematic:
On the one hand, most took an attitude of what they considered robust common sense, namely that “basic male urges” must be satisfied. On the other hand, they have usually regarded woman as a threat to military discipline and effectiveness.
The need to keep morale up in a mass conscript army, coupled with the fear that certain relations could undermine the efficiency and fighting spirit of American soldiers, meant that Australian and American officials accepted and even encouraged some sexual relations (prostitution) while discouraging others (marriage). Ultimately, authorities promoted high time preference among their men at the expense of future orientation. After all, if G.I. Joe, fighting in New Guinea, was preoccupied with his new bride and prospective life, how effective a fighter would he be? How much better to instead satiate male urges via prostitution, encourage short-termism and keep soldiers focused on killing the enemy?
Marriage was, nevertheless, a sensitive issue for American officials, as it was a basic civilian right. Moreover, marriage emphasized the duality of American conscripts; they were concurrently soldiers and citizens. Reynolds argues that this duality has preoccupied army commanders historically:
In armies of occupation it is particularly difficult to prevent soldiers from reverting to civilians, because that is the nature of the surrounding society. Soldiers are being imposed on civilians, often quite directly as when they are billeted on a household ... and the unoccupied soldier’s propensity for female company has to be satisfied in some way.
Nothing could expose this duality more than wartime marriages. Because of this fear of soldiers reverting to civilians, armies in the past have “tried to prohibit or dissuade their men from contracting marital relationships especially while on duty abroad.” During the Depression, marriages in the U.S. Army were only allowed when a soldier-applicant obtained his commanding officer’s permission and demonstrated that he could support his dependents. This policy continued into the 1940s and was applied in Australia.
On 20 February 1942, Major General Julian C. Barnes sent a memorandum to all base section commanders specifying how they should handle marriage requests. The memorandum stated that:
As a matter of policy to govern the action of troops on Australian soil, it is the desire of the Commanding General that all commanding officers, when presented with a request by men of their command for permission to marry, use their utmost influence to discourage any such plans on the part of American soldiers during the period of war.
The policy in Australia was no different from that in mainland America. Soldiers were not barred from marrying, only strongly discouraged. Barnes’s superiors in Washington had reasonable grounds for doing so. Foremost among these was the fact that they believed marriages undermined the war effort. It was further alleged that marriages were unfair to prospective brides:
Action on the part of any soldier to institute family life in the field, and thus create a moral obligation, is not only unfair to the wife but a burden to the soldier and all those concerned in his welfare — both Army and Civilian — at a time when the soldier is already under obligation to give his services without restriction and without family ties for the duration of the emergency.
It is worth noting that despite these efforts to discourage marriages and the higher time preferences brought on by the war, perhaps as many as 12,000 GIs married Australian women. Some couples even made sure there was a baby on the way so to force the hand of authorities.
Examining how the brutality of war dehumanizes combatants is nothing new among historians. Using time preference theory to help explain the behavior of soldiers and civilians in wartime, however, is novel. Short-termism, reckless consumption, crime, and sexual flings are all symptomatic of higher time preferences brought on by war. Property rights violations (i.e., involuntary servitude) and the greater chance of death increased time preferences which in turn encouraged uncivilized behavior among GIs. Australian civilians (in the context of this study, women) were not immune to the effects of war. They too exhibited higher time preferences; this is best illustrated in infidelities and short term sexual flings with GIs. Not surprisingly, the American military encouraged high time preferences by promoting flings and prostitution at the expense of future-orientated relations (i.e., marriage). Uncle Sam wanted G.I. Joe focused on fighting the Japanese not on future plans with Mrs. Joe.
In his examination of time preference in Man, Economy and State, Murray Rothbard asks the reader:
Suppose, for example, that people were certain that the world would end on a definite date in the near future. What would happen to time preferences and to the rate of interest? Men would then stop providing for future needs and stop investing in all processes of production longer than the shortest. Future goods would become almost valueless compared to present goods, time preferences for present goods would zoom, and the pure interest rate would rise almost to infinity.
GIs were not certain the “world would end on a definitive date in the near future.” Nevertheless, the war in the Pacific did increase the likelihood of death and the fear of death in the near future. It is no surprise then that for many American soldiers “future goods would become almost valueless” and that “time preferences for present goods would zoom.”
 “Establishment of Headquarters USAFIA at Melbourne, Australia,” [no date], National Archives and Records Administration II (NARA) (College Park), RG 496, Entry 47, Box 326, File: Establishment of Headquarters USAFIA at Melbourne, Australia, 13.
 Douglas MacArthur, Reminiscences (New York: Da Capo Press, 1964), 154.
 Darryl McIntyre, “Paragons of Glamour: A Study of U.S. Military Forces in Australia” (PhD dissertation., University of Queensland, 1989), 249; Sunday Mail (Brisbane), 22 October 1944.
 E. Daniel Potts and Annette Potts, Yanks Down Under: The American Impact on Australia (Melbourne: Oxford University Press, 1985), 234.
 Ernest A. Burt to Staff Judge Advocates, 16 September 1943, NARA II (College Park), RG 495, Entry 179, Box 1269, File: Prisoners.
 Constable E.J. Breene to Inspector of Police, 21 April 1943, QSA, Police Files, A/12031.
 Edward C. Banfield, The Unheavenly City Revisited (Boston: Little Brown, 1974), 140-41.
 Hans-Herman Hoppe, Democracy, the God that Failed: The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick: New Jersey, Transaction Publishers, 2001), 31.
 ___, “Time Preference, Government, and the Process of De-civilization – from Monarchy to Democracy” Journal des Economistes et des Etudes Humaines 5:2/3 (Juin/Septembre 1994): 329.
 Ibid., 322.
 “Three American Sailors, Jerome Marvin Leissner, Allen Hamed and Albert J. Black, Wilful Destruction of Property,” 19 March 1944, QSA, Police File, A/12035.
 H. Bischof and N.W. Bauer to Officer in Charge, 17 February 194, QSA, Police Files, A/12032.
 C. Risch to Officer in Charge, 01 July 1944, Queensland Police Museum, File: Murder of Doris May Roberts by Avelino Fernandez, 1944 ; C. Risch to Officer in Charge, 01 August 1944, Queensland Police Museum, File: Murder of Doris May Roberts by Avelino Fernandez, 1944; Courier Mail, 20 June 1944.
 David Reynolds, Rich Relations: The American Occupation of Britain, 1942-45 (London: Phoenix Press, 1996), xxviii.
 Lawrence Ingraham and Frederick Manning, “American Military Psychiatry,” in Richard A. Gabriel, ed., Military Psychiatry: A Comparative Perspective (New York: Greenwood Press, 1986) 58-59, quoted in Reynolds, Rich Relations, 78.
 Arthur Miller, Situation Normal (New York: Reynal & Hitchcock, 1944), 172, quoted in Reynolds, Rich Relations, 78.
 Walter A. Luszki, A Rape of Justice: MacArthur and the New Guinea Hangings (Madison Books: Lanham, Maryland, 1991), 90.
 W.N. Henry to Inspector of Police, 29 February 1944, QSA, Police Files, A/12031; W.N. Henry to Inspector of Police, 23 June 1944, QSA, Police Files, A/12031; W.N. Henry to Inspector of Police, 17 October 1944, QSA, Police Files, A/12031.
 Thomas E. Rilea to Commanding General, USASOS, 21 May 1943, NARA II (College Park), RG 495, Entry 48, Box 985, File: 250.3.
 Vince Kelly, Rugged Angel, The Amazing Career of Policewoman Lillian Armfield (Sydney: Angus & Roberts, Ltd., 1961), 182-84.
 Courier Mail , 30 December 1943.
 Rosemary Campbell, Heroes and Lovers: A Question of National Identity (Sydney: Allen & Unwin, 1989), 77.
 “Brothels,” Vedette Magazine: The Journal of Queensland Police Service, October 1995, 9; Potts, Yanks Down Under, 147; John Hammond Moore, Over-sexed, Over-paid, and Over here: Americans in Australia, 1941-1945 (St. Lucia: University of 9Queensland Press, 1981), 216.
 B.M Fitch to Commanding Officers, Camp Royal Park Victoria, Camp Darley Victoria, 19 February 1942, NARA II (College Park), RG 495, Entry 1799, Box 1266, File: Morals and Conduct.
 Michael Sturma, “Public Health and Sexual Morality, Venereal Disease in World War II Australia” Signs 3:4 (Summer 1988): 727; Campbell, Heroes and Lovers, 98.
 Reynolds, Rich Relations, 64.
 Ibid., 69.
 Ibid., 64.
 In the chaos of early 1942, there were many changes in the command structure of the US forces in Australia until MacArthur’s arrival in March. Thus, General Barnes was initially in command of US forces in the country, only to be supplanted by Lieutenant General George Brett. MacArthur took over command on 11 March 1942 and became Supreme Commander of the Southwest Pacific Area a month later. See Joseph Bykofsky and Harold Larson, United States Army in World War II, The Technical Services, The Transportation Corps: Operations Overseas (Washington DC, Office of the Chief of Military History, 1957), 426-29.
 B.H. Fitch to Commanding Officers, All Base Sections, United States Forces in Australia, 20 February 1942, National Archives and Records Administration II (NARA II) (College Park), RG 495, Entry 45, Box, 185, File: 291.1.
 Potts, Yanks Down Under, 362; M.J. Conway to Commanding Generals All Base Sections, 07 May 1943, NARA II (College Park), RG 495, Entry 45, Box, 184, File: 291.1.
 Murray Rothbard, Man Economy and State with Power and Market, 2nd Edition (Auburn: Ludwig von Mises Institute, 2009), 444.